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Cities in line for new £1.7bn transport connection fund

Theresa May has revealed the first details of government's Industrial Strategy due to be published next Monday in the wake of the chancellor's autumn budget. A £1.7bn Transforming Cities Fund will be available for improving transport in city regions and spending on industry research and development will increase to 2.4% of GDP by 2027, starting with an additional investment of £2.3bn in 2020/21.

According to May's announcement issued by 10 Downing Street, this will raise annual public spending on R&D to around £12.5bn, as government promised last year. The total over the 10 years up ro 2027 could be as high as £80bn if investment remains at 2.4% of GDP and if the current government and its plans last that long.

“Our Industrial Strategy will propel Britain to global leadership of the industries of the future, seizing the big opportunities of our time – from artificial intelligence and big data to clean energy and self-driving vehicles,” May said.

"This investment will see public R&D spending increase as a share of GDP for each of the next five years and bring investment to levels last seen in the 1980s. It builds on the commitment made last year to raise R&D spending from £9bn in 2015/16 to £12bn in 2020/21."

Next week the Industrial Strategy white paper will announce four 'grand challenges' that government wants to tackle and in which the UK has a competitive edge. These are artificial intelligence and the data economy; clean growth; healthy ageing; and the future of mobility.

The Transforming Cities Fund is intended for helping city regions to improve local transport connections between suburbs and city centres, including an additional £250m for the West Midlands Combined Authority. The £1.7bn fund will support projects that reduce congestion, improve connectivity and make use of technology based mobility services.

Transport Secretary Chris Grayling said: “Investment in transport is crucial to a strong and resilient economy. The Transforming Cities Fund will drive productivity and growth in cities where this is most needed, connecting communities and making it quicker and easier for people to get around.

“We have already seen the impact of better integrated transport links for both passengers and the local economy in cities like Nottingham and Manchester. This new fund will enable more English cities to reap these benefits, helping to deliver the opportunities and ambition of the Industrial Strategy across the country, as well as driving forward the Northern Powerhouse and Midlands Engine.”

Commenting on the plans, Andrew Carter, chief executive of the think tank Centre for Cities, said: “Poor transport links are one of the biggest factors preventing city regions like the West Midlands from growing their economies, so the government is right to focus on addressing this issue. Our research shows that strengthening connections within major cities will have a significant impact in boosting productivity, growth and jobs, especially if tied in with measures to address skills gaps in these places."

Labour's shadow business secretary, Rebecca Long-Bailey, said the government's proposals were "too little, too late". "After years of languishing below it, Britain should be aiming to be above the OECD average on R&D spending," she said. "And to radically transform the transport infrastructure of the UK, we need more than the Conservatives are offering."